A Few Thoughts on Google in 2009
In response to my last post, "Magikplp" asked what I thought might happen with Google in 2009. I suspect that Google will have a good year in 2009 but not a *great* year. Google will continue to be a force to reckon with and will remain the leader in most things web, but this will be a year of building new technologies and investing in the future, while navigating a tough economic climate - not necessarily a year for exponential profit growth (though I don't think profits will be bad in 2009).
Google is making a huge investment in Android, which won't pay off in the near future because mobile advertising hasn't taken off yet. Google doesn't expect to make money on their 30% cut off off apps, once they start allowing paid-apps on the Android Market. Here's what Eric Chu (Android Mobile Platform Program Manager) said about it in a recent blog post:
Starting in early Q1 [2009], developers will also be able to distribute paid apps in addition to free apps. Developers will get 70% of the revenue from each purchase; the remaining amount goes to carriers and billing settlement fees—Google does not take a percentage. We believe this revenue model creates a fair and positive experience for users, developers, and carriers.
Like many companies, Google has reportedly already had layoffs and reduced the number of consultants they employ. They've also eliminated several of the premium salsas from their free cafeteria (seriously - I'm laughing while I type this, but I actually heard Google employees complaining about it the other week!). While there is likely to be a watchful eye on spending, Google has a smart executive team, and I bet they'll keep their eyes open for good technology acquisitions and investments - especially start-ups that compliment Google's technology, but are unable to monetize on their own in a tough economy.
Most of all, in 2009, I think Google (like Microsoft) will be focusing on tying up loose ends and making their different assets work better together... web-based software, mobile, many forms of advertising, behavioral targetting and optimization, LBS, clean tech (google.org), and more.
